Shares of agrochemicals companies such as UPL, Rallis and Monsanto India are trading at life-time highs in an otherwise weak market on the Bombay Stock Exchange (BSE).
UPL (formerly United Phosphorus) and Rallis India have surged more than 20% each after reporting a strong set of numbers for the quarter ended March 31, 2014 (Q4).
UPL has soared by 6% to Rs 296, extending its 30% rally in the past seven trading days, after posting 29% year-on-year increase in consolidated profit at Rs 360 crore for the quarter ended on March 31 on account of higher sales.
For the current fiscal FY15, UPL has guided for 12-15% organic growth, with a margin improvement of 50-100bps.
Prabhudas Lilladher believes that robust earnings growth, stable working capital despite increasing contribution of Brazil, reduction in debt, free cash flow and improved disclosures would eventually lead to a re-rate of the stock to double-digit multiples.
Rallis India, up 2.4% at Rs 205, has rallied 23% from Rs 167 on April 23. The Tata Group Company had reported a 71% year-on-year (yoy) jump in net profit at Rs 19.3 crore for the quarter ended March 2014 as against Rs 11.26 crore in the same period last year.
Balwindar Singh, an analyst at Prabhudas Lilladher has upgraded the target price of the stock by 20% to Rs 210; However, he has maintained ‘Accumulate’ rating on the stock due to premium valuations and looming risk of El-Nino.
UPL (formerly United Phosphorus) and Rallis India have surged more than 20% each after reporting a strong set of numbers for the quarter ended March 31, 2014 (Q4).
UPL has soared by 6% to Rs 296, extending its 30% rally in the past seven trading days, after posting 29% year-on-year increase in consolidated profit at Rs 360 crore for the quarter ended on March 31 on account of higher sales.
For the current fiscal FY15, UPL has guided for 12-15% organic growth, with a margin improvement of 50-100bps.
Prabhudas Lilladher believes that robust earnings growth, stable working capital despite increasing contribution of Brazil, reduction in debt, free cash flow and improved disclosures would eventually lead to a re-rate of the stock to double-digit multiples.
Rallis India, up 2.4% at Rs 205, has rallied 23% from Rs 167 on April 23. The Tata Group Company had reported a 71% year-on-year (yoy) jump in net profit at Rs 19.3 crore for the quarter ended March 2014 as against Rs 11.26 crore in the same period last year.
Balwindar Singh, an analyst at Prabhudas Lilladher has upgraded the target price of the stock by 20% to Rs 210; However, he has maintained ‘Accumulate’ rating on the stock due to premium valuations and looming risk of El-Nino.
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